US EARLY MORNING: US equity futures flat; more jobs data ahead before Friday's NFP report

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  EQUITIES: US equity futures are around flat ahead of another batch of labour market data, ahead of Friday's NFP report. APAC stocks saw downside following a weak handover from the US, while participants digested mixed Chinese trade figures, which showed the first expansion in China’s exports since April although imports surprisingly contracted. European stocks opened on the back foot, with newswire reports attributing the downside on the tick higher in bond yields.


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  TREASURIES: Yields are higher along the Treasury curve, with the long-end underperforming as the curve bear-steepens. 10yr yields eased to the lowest in three months on Wednesday in wake of soft ADP jobs data, which has reinforced the narrative around a slowdown in labour market conditions. There is more jobs data due today (Challenger layoffs, weekly claims) ahead of Friday's NFP data.


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  FOREX: The Dollar Index is slightly lower, but attention is on the JPY, which has strengthened by around 1.5% against the greenback after BoJ Governor Ueda discussed options for a potential pivot away from negative rates.


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  CRUDE: Crude benchmarks are firmer, rebounding from the six-month lows printed on Wednesday amid concerns about the demand-side of the energy equation. Brent futures entered contango on Wednesday, with reports suggesting that it was evidence of less concerns regarding the supply side, while easing inflation and softening growth dynamics instead pose questions about the health of the global economy.

TODAY’S AGENDA:

• Our interactive calendar is available here; a pdf version can be downloaded here.


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  EUROPEAN DAY AHEAD: Ahead of next week's policy meeting, the Norges Bank's Regional Network Report is due to be released today. Eurozone GDP revisions and Employment for Q3 are expected to be unrevised. On the fiscal front, Eurozone finance ministers will meet regarding draft budget plans for 2024. Elsewhere, ECB's Elderson will speak at an event organised by Centre for European Policy Studies. The Riksbank's Bunge is also on today's speaker's slate. Spain will sell EUR 2.5-3.5bln of 2029, 2039 debt, as well as a 2033 linker; France will sell between EUR 4-5bln of 2027, 2032, 2034 debt as well as a 2029 linker.


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  US DAY AHEAD: Labour market data is once again in focus ahead of Friday’s NFP report. On Thursday, Challenger will release its layoffs data for November, while weekly initial jobless claims are seen ticking up a touch, while continuing claims are seen easing slightly. Wholesale sales and inventory revisions are released after the open. Towards the end of the session, consumer credit stats for October will be released. Elsewhere, the US Treasury will announce the sizes for next week’s 3yr, 10yr, and 30yr sales. Notable corporates reporting today include: DG, LULU, DOCU, AVGO (estimates here).

EQUITY NEWS:

HEALTHCARE:

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  Drug Costs - White House supports expanding "march-in rights," allowing the government to reclaim patents for expensive medicines linked to federally funded research, STAT News reports. A forthcoming framework from the National Institutes of Health will outline conditions for utilising this authority, potentially impacting the pharmaceutical industry.


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  AbbVie (ABBV), Cerevel Therapeutics (CERE) - AbbVie is to acquire Cerevel Therapeutics for about USD 8bln, focusing on neurological drugs like those for Parkinson's. Will pay USD 45/shr. The potential deal follows AbbVie's recent USD 10.1bln deal for ImmunoGen, showcasing its interest in innovative medications.


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  Bristol Myers Squibb (BMY) - Raises dividend +5.3% to USD 0.60/share.


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  Veeva (VEEV) - Q3 adj. EPS 1.34 (exp. 1.30), Q3 revenue USD 616.5mln (exp. 616mln). Sees Q4 adj. EPS of 1.30 (exp. 1.28), and sees Q4 revenue between USD 620-622mln (exp. 623.2mln). Raises FY24 adj. EPS outlook to USD 4.76 (exp. 4.70, prev. 4.68), and lowers FY24 revenue outlook to between USD 2.353-2.355bln (exp. 2.37bln) from USD 2.365-2.37bln. Reiterates FY25 revenue outlook of at least USD 2.75bln (exp. 2.74bln).


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  Sanofi (SNY) - Announces that R&D will lead to a 50% increase in the number of Phase 3 studies between 2023 and 2025, creating the pipeline momentum. Separately, Sarclisa (isatuximab) Phase 3 trial met primary endpoint of progression free survival in patients with newly diagnosed multiple myeloma not eligible for transplant. Elsewhere, CEO said that during the earnings announcement he should have done a better job of explaining that almost all of the increase in R&D investment is on development.

TECH:

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  Advanced Micro Devices (AMD), Nvidia (NVDA) - Tech giants Meta (META), OpenAI (MSFT-backed), and Microsoft announced their commitment to AMD’s new AI Instinct MI300X chip, a shift away from Nvidia’s pricier graphics processors fundamental to AI applications such as OpenAI’s ChatGPT, BNN reports. The move is poised to disrupt the AI chipset industry, set to challenge Nvidia’s reign and potentially lower AI development costs, the report added.


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  AI Stocks - The EU nears a major AI regulation deal, encompassing comprehensive controls for generative AI like OpenAI's ChatGPT and Google's Bard, BBG reports. Negotiators reached a compromise in discussions aiming for a formal agreement on the AI Act.


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  Apple (AAPL) - Apple's senior executive managing touch-screen tech, health sensors, and Face ID is departing, Bloomberg reports. VP Steve Hotelling is to retire, having overseen vital iPhone, iPad, Apple Watch tech, and the Vision Pro headset.


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  Braze (BRZE) - Q3 EPS -0.05 (exp. -0.13), Q3 revenue USD 124mln (exp. 117.3mln). Exec said it was confidently on track to meet profitability targets for Q4 and for FY 2025. Sees Q4 EPS between -4c to -5c (exp. -0.07), and sees Q4 revenue USD 124-125mln (exp. 119.8mln). Sees FY24 EPS between -0.27 and -0.26 (exp. -0.37; prev. saw -38c), and sees FY24 revenue between USD 465-466mln (exp. 454mln).


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  C3.ai (AI) - Q2 EPS -0.13 (exp. -0.18), Q2 revenue USD 73.2mln (exp. 74.3mln). Sees Q2 revenue between USD 74-78mln (exp. 77.7mln). Reiterates FY24 revenue outlook of USD 295-305mln (exp. 307.9mln).


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  Semtech (SMTC) - Q3 EPS 0.02 (exp. -0.13), Q3 revenue USD 200.9mln (exp. 204.5mln). Exec noted stabilisation of end market demand for its semiconductor business. Sees Q4 EPS between -0.11 and +0.01 (exp. -0.03), Q4 revenue between USD 180-200mln (exp. 211.8mln).


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  Verint (VRNT) - Q3 EPS 0.65 (exp. 0.57), Q3 revenue USD 219mln (exp. 215.9mln). 12-month SaaS pipeline at the end of Q3 over 20%+ Y/Y. Sees FY24 EPS of 2.65 (exp. 2.62), and sees FY24 revenue around USD 910mln +/- 2% (exp. 907.3mln). Lowers SaaS revenue estimate is cut to +15% (prev. saw +18-20%).

COMMUNICATIONS:

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  GameStop (GME) - Q3 EPS -0.01 (exp. -0.08), Q3 revenue USD 1.08bln (exp. 1.18bln). Board approved a new investment policy that permits the company to invest in equity securities, among other investments.


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  Meta Platforms (META) - Launches end-to-end encryption for all personal chats and calls on Messenger and Facebook.

CONSUMER:

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  Amazon (AMZN) - CEO tells CNBC that consumers were still spending, but were looking for bargains, adding that whenever customers can trade down in price, they are wanting to do so. Also said the consumables business growth rate was very strong. Expects price of Prime membership to increase from time to time. Continues to be very bullish on AWS in 2024.


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  Chewy (CHWY) - Fell over 10% afterhours following results and lower guidance. Q3 EPS 0.15 (exp. -0.06), Q3 revenue USD 2.74bln (exp. 2.75bln). Exec said Black Friday and Cyber Monday traffic exceeded expectations; active customers declined marginally in the quarter. Named David Reeder as CFO, joining from GlobalFoundries; interim CFO Stacy Bowman will continue serving as Chief Accounting Officer. Sees Q4 revenue between USD 2.78-2.80bln (exp. 2.93bln). Lowers FY23 revenue outlook to between USD 11.08-11.10bln (exp. 11.25bln) vs previous view of USD 11.15-11.35bln.


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  Inditex (IDEXY), Burberry (BURBY), Ralph Lauren (RL) - A report shows these companies are at risk of sourcing products which have been made by Uyghurs forced to work in state-imposed labour transfer programmes, according to Politico. The research is backed by the Sheffield Hallam University and Uyghur rights organisations.


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  Nio (NIO) - The Chinese EV maker may expand job cuts beyond the initial 10%, possibly reaching 20-30% in certain departments, Bloomberg reports. The focus is on non-core areas or those not yielding immediate returns or demanding substantial investment.


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  Renault (RNLSY) - Seeks to cut production cost per vehicle by 30% for ICE vehicles and 50% for EV by 2027.


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  Stellantis (STLA) - Seeks to void California vehicle emissions deal with rival automakers.


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  Watches of Switzerland (WOSGF) - H1 revenue GBP 761mln (prev. 765mln), adj. EBITDA GBP 94mln (prev. 104mln), EPS 0.198 (prev. 0.272). FY24 guidance maintained; does not reflect any expectation of an improvement in consumer confidence in the remainder of the financial year. To continue to expand the number of showrooms to meet demand.


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  Greif (GEF) - Q4 adj. EPS 1.56 (exp. 1.29), Q4 revenue USD 1.31bln (exp. 1.34bln). Sees FY24 EBITDA of at least USD 585mln (exp. 785mln).


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  McDonald's (MCD) - Introduces CosMc's, a small beverage-focused concept store, initially launching in Illinois. The plan includes more pilot locations in Dallas San Antonio by 2024.


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  Oxford Industries (OXM) - Q3 adj. EPS 1.01 (exp. 0.96), Q3 revenue USD 326.6mln (exp. 324.7mln). Sees Q4 EPS between 1.83-2.03 (exp. 2.08), and Q4 revenue between 403-423mln (exp. 403.3mln). Lowers FY24 adj. EPS outlook to between 10.10-10.30 (exp. 10.32) from 10.30-10.60, and narrows FY24 revenue outlook to between USD 1.57-1.59bln (exp. 1.57bln) from USD 1.57-1.6bln.


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  Farfetch (FTCH) - Disclosed J. Michael Evans' immediate resignation from its Board. The move aligns with his position at Alibaba (BABA), was not due to any disagreements.


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  Fisker (FSR) - CEO addressed recent concerns, stating reports on the company are exaggerated. Highlighting achievements, including launching in 11 countries and creating sustainable EVs, he emphasised positive strides and undervaluation, plans a business update soon.


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  Duckhorn Portfolio (NAPA) - Q1 EPS 0.15 (exp. 0.16), Q1 revenue USD 102.5mln (exp. 103.1mln). Sees FY24 EPS between 0.67-0.69 (exp. 0.68), sees FY24 revenue USD 420-427mln (exp. 430.2mln), FY24 EBITDA seen between USD 150-153mln (vs previous view of USD 150-155mln).

INDUSTRIALS:

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  AerSale (ASLE), Boeing (BA) - FAA issued AerSale a Supplemental Type Certificate for "AerAware", the Company's revolutionary Enhanced Flight Vision System for the Boeing B737NG product line. Marks the world's first commercial EFVS system2 to achieve a 50% visual advantage and the first large transport aircraft to be certified with a complete dual-pilot EFVS solution featuring a Head-Wearable Display.


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  Canadian National (CN) - Acquired Iowa Northern Railway, operating around 275 track miles in Iowa, pending regulatory review.


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  Nikola (NKLA) - To offer USD 100mln in common stock, USD 200mln in Green Convertible Senior Notes. Anticipates granting underwriters options for additional purchases.


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  Northrop Grumman (NOC) - Announced a new USD 2.5bln share repurchase plan, increasing its outstanding authorisation to approximately USD 3.8bln.

ENERGY:

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  Chevron (CVX) - Announced USD 16bln 2024 capex budget, with upstream spending expected at about USD 14bln and downstream spending expected around USD 1.5bln.

FINANCIALS:

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  CME Group (CME) - CME extends CEO Terry Duffy's tenure until 31st December 2025.

07 Dec 2023 - 09:30- Research Sheet- Source: Newsquawk